U.S. stocks experienced a significant upswing on Thursday, buoyed by exceptional earnings from Nvidia and an unexpectedly strong jobs report that sparked renewed optimism regarding interest rate cuts. The tech-heavy Nasdaq Composite led the charge, surging 2.2%, while the S&P 500 followed closely with a 1.7% increase. The Dow Jones Industrial Average, less influenced by technology stocks, climbed 1.3%, translating to a rise of over 500 points.
This positive momentum followed a modest recovery on Wednesday, which saw stocks breaking a four-day losing streak. Nvidia’s stock jumped nearly 5% in early trading after the company reported better-than-expected earnings and provided a more optimistic revenue forecast for the fourth quarter. CEO Jensen Huang highlighted “off the charts” demand for the company’s Blackwell processors, alleviating fears that a recent slowdown in AI-related stocks suggested a longer-term decline.
In a further boost to market sentiment, the September nonfarm payrolls report, released by the Bureau of Labor Statistics, showed the U.S. economy generated 119,000 jobs in September—significantly higher than the 51,000 jobs economists had projected. However, the unemployment rate rose to 4.4%, up from 4.3% in August, diverging from expectations that it would hold steady. The Federal Reserve Bank of Chicago had projected a slight increase to 4.35%.
The jobs report prompted options traders to reassess the likelihood of a rate cut at the Federal Reserve’s next meeting in December. Early morning estimates indicated approximately a 35% chance of a rate cut, a notable rise from 28% earlier in the day and 30% the previous day. This report was particularly crucial, serving as the first significant insight into the U.S. economy following the recent government shutdown, which had obscured analysts’ perspectives on potential interest rate adjustments.
Minutes from the Fed’s most recent meeting indicated that policymakers have “strongly differing views” on whether a cooling labor market or persistent inflation poses a greater threat to the economy. This divergence has contributed to uncertainty regarding the Fed’s December policy decisions, with some officials indicating a preference for maintaining current rates.
In other earnings news, Walmart announced a revision of its full-year forecasts upward after reporting strong profit and sales figures for the third quarter. However, its shares exhibited volatility as investors weighed the implications of the results for consumer strength heading into the holiday season.
Moreover, Asian tech stocks responded favorably to Nvidia’s earnings report, with shares of prominent companies such as TSMC and SK Hynix rising sharply. The broader Asian market reflected this positive sentiment, resulting in considerable gains particularly in technology-focused indexes.
Despite the encouraging data, concerns regarding the labor market persisted. The rising unemployment rate and other economic indicators prompted discussions on the potential ramifications of layoffs and broader employment trends impacting consumer confidence.
Overall, the day’s trading reflected a complex interplay of factors, including earnings reports, jobs data, and evolving perceptions of future monetary policy, that collectively shaped the landscape of the U.S. stock market.
